Best Company Sells Office Supplies -
Required: Prepare an Income Statement for Best Company, a Operating

question 99

Essay

Best Company sells office supplies. The following information summarizes Best's operating activities for 2012:
$\begin{array}{|l|r|}\hline \text { Utilities for store } & \$ 6,000 \\\hline \text { Rent for store } & \$ 8,000 \\\hline \text { Sales commissions } & \$ 4,500 \\ \hline \text { Purchases of merchandise } & \$ 54,000 \\\hline \text { Inventory on January } 1,2012 & \$ 30,000 \\\hline \text { Inventory on December } 31,2012 & \$ 20,500 \\\hline \text { Sales revenue } & \$ 108,000 \\\hline\end{array}$
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Required: Prepare an income statement for Best Company, a merchandiser, for the year ended December 31, 2012.using the format below:
Sales revenue
$$\begin{array} { | l | l | l | } \hline \text { Cost of goods sold } & \quad\quad&\quad\quad \\\hline \text { Beginning inventory } & & \\\hline \text { Purchases } & & \\\hline \text { Cost of goods available for sale } & & \\\hline \text { Ending inventory } & & \\\hline \text { Cost of goods sold } & & \\\hline \text { Gross profit } & & \\\hline \text { Selling expenses } & & \\\hline \text { Sales commissions } & & \\\hline \text { General expenses } & & \\\hline \text { Rent expense } & & \\\hline \text { Utilities expense } & & \\\hline \text { Total operating expenses } & & \\\hline \text { Net income/(loss) } & & \\\hline\end{array}$$

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Definitions:

Subordinate

A subordinate is an individual who works under the direction of someone else, typically answering to a manager or supervisor in the organizational hierarchy.

Intra-Individual Level

Pertaining to processes or variations occurring within a single individual, as opposed to between individuals or in a group.

Competitive Strategy

refers to a business plan crafted to gain an advantage over rivals in the market, often through differentiating products, services, or operational effectiveness.

Subordinate Motivation

The drive or inspiration that employees at lower levels of an organization have to achieve work-related goals.